I guess JC has countered Twilio with the BBM SDK. (When I said that they had outsourced BBM, I only meant the consumer platform play, think BB's WeChat.)

I've been worried that JC would spread BB's resources too thin, and end up missing out on some huge opportunities. That said, to outsource hardware + consumer BBM has greatly alleviated my concerns.

Microsoft already has a EMM play, which they've bundled in the Windows 365 package. They've also made some deals with a Renault (or was it another car company?) to supply cloud intelligence.

In one sense, BB is back to being a B2B company. That might be an indication of who JC is aiming at.

I guess one perspective to come at this is to see if there is some major company that would fill a product offering that is missing in their lineup by acquiring BB, while either unlocking substantial synergies or create a 1+1=5 dynamic.

I know, but Twilio just raised their forecast to 373 million in annual revenue, and BBM SDK... is probably doing under 10 million annually. Both companies are valued approx. the same if you extract cash. It just shows that it's better to have one initiative doing 20-30% in a promising industry than many initiatives doing maybe 10%. Also more of a challenge for JC to turn a profit than for Twilio in 1-2 years time? I wonder sometimes where BlackBerry would be without the Good acquisition....

I know, but Twilio just raised their forecast to 373 million in annual revenue, and BBM SDK... is probably doing under 10 million annually. Both companies are valued approx. the same if you extract cash. It just shows that it's better to have one initiative doing 20-30% in a promising industry than many initiatives doing maybe 10%. Also more of a challenge for JC to turn a profit than for Twilio in 1-2 years time? I wonder sometimes where BlackBerry would be without the Good acquisition....

Posted via CB10

I really give John Chen credit for his acquisitions, because they enabled BlackBerry to offer a comprehensive UEM software suit that not many vendors have.

We can all agree that without these acquisitions BlackBerry would have been vanished from the market as of now.

On the other hand side he also has to take credit for mishandling the phone business by repeating the same errors like his predecessors and by misrepresenting new phones in public.

And unfortunately for the software and solution business he also totally f**ed up the sale side of the business and although he admitted shortfalls in sales three quarters ago, he so far was not able to tackle these shortfalls' which is an absolute unacceptable behaviour for a high paid CEO of a public company.

I really give John Chen credit for his acquisitions, because they enabled BlackBerry to offer a comprehensive UEM software suit that not many vendors have.

We can all agree that without these acquisitions BlackBerry would have been vanished from the market as of now.

On the other hand side he also has to take credit for mishandling the phone business by repeating the same errors like his predecessors and by misrepresenting new phones in public.

And unfortunately for the software and solution business he also totally f**ed up the sale side of the business and although he admitted shortfalls in sales three quarters ago, he so far was not able to tackle these shortfalls' which is an absolute unacceptable behaviour for a high paid CEO of a public company.

Posted via CB10

How did he mishandle the phone business? He dragged out hardware as long as possible and then has even managed to license out the brand. The phone business was dead once BBOS would be replaced. There was never the ability to replace the monthly revenue from SAF with anything since the carriers wanted that revenue for themselves via new data plans. BB was never in the same leagues as Google OEM, Apple or Microsoft regarding cash flows or revenue. I'd argue that BB10 was a smokescreen to give BB founders time for dumping their stock at the high valuations of it's time. When Chen showed up, the strategy implemented was really the only available one and Fairfax hired Chen for that reason.

How did he mishandle the phone business? He dragged out hardware as long as possible and then has even managed to license out the brand. The phone business was dead once BBOS would be replaced. There was never the ability to replace the monthly revenue from SAF with anything since the carriers wanted that revenue for themselves via new data plans. BB was never in the same leagues as Google OEM, Apple or Microsoft regarding cash flows or revenue. I'd argue that BB10 was a smokescreen to give BB founders time for dumping their stock at the high valuations of it's time. When Chen showed up, the strategy implemented was really the only available one and Fairfax hired Chen for that reason.

There was no marketing strategy because they were setting up to license the brand. They had decided to exit hardware with the hiring of Chen but tasked him to keep BB afloat. BB couldn't let it be known at time of plans because this would further erode what little investor confidence was left. They also had vendor commitments to meet unless they wanted to break those by filing bankruptcy. Again, that strategy would have failed shareholders including Fairfax. There was no marketing strategy, because, there was nothing really to market long term. Also, they didn't ever have the cash, even if they wanted to market anything. The advertising budgets of Apple, Google and Microsoft all exceeded BlackBerry revenue at it's peak. BlackBerry had the proverbial knife when the big three and their OEM's came packing guns for the fight.

I know, but Twilio just raised their forecast to 373 million in annual revenue, and BBM SDK... is probably doing under 10 million annually. Both companies are valued approx. the same if you extract cash. It just shows that it's better to have one initiative doing 20-30% in a promising industry than many initiatives doing maybe 10%. Also more of a challenge for JC to turn a profit than for Twilio in 1-2 years time? I wonder sometimes where BlackBerry would be without the Good acquisition....

I think I would frame it slightly differently. I don't know how much BB had to invest to get a public SDK up and running, but at this point in time it's a sunken cost. Unless the marginal cost is substantial, which I can't imagine it is, then it should probably be a high margin product.

I haven't really read too too much about the SDK. I guess they're targeting use cases like if Slack wants (etc.) wants to have a secure channel, they could build it using the SDK and bake it into Slack making it a seamless experience for the end user. Have I got that right, or is it different from Twilio?

That said, your revenue point still stands. High margin on a small revenue is still a small number.

And yes, I agree that BB buying GOOD was both very fortunate and left them with a much better product.

I think I would frame it slightly differently. I don't know how much BB had to invest to get a public SDK up and running, but at this point in time it's a sunken cost. Unless the marginal cost is substantial, which I can't imagine it is, then it should probably be a high margin product.

I haven't really read too too much about the SDK. I guess they're targeting use cases like if Slack wants (etc.) wants to have a secure channel, they could build it using the SDK and bake it into Slack making it a seamless experience for the end user. Have I got that right, or is it different from Twilio?

That said, your revenue point still stands. High margin on a small revenue is still a small number.

And yes, I agree that BB buying GOOD was both very fortunate and left them with a much better product.

I'd agree that the SDK was probably a modest incremental cost.

And yes, BB is targeting enterprise use. I've heard from our internal tools team that BBM SDK is substantially more expensive than twilio, but presumably much more secure.

I think I would frame it slightly differently. I don't know how much BB had to invest to get a public SDK up and running, but at this point in time it's a sunken cost. Unless the marginal cost is substantial, which I can't imagine it is, then it should probably be a high margin product.

I haven't really read too too much about the SDK. I guess they're targeting use cases like if Slack wants (etc.) wants to have a secure channel, they could build it using the SDK and bake it into Slack making it a seamless experience for the end user. Have I got that right, or is it different from Twilio?

That said, your revenue point still stands. High margin on a small revenue is still a small number.

And yes, I agree that BB buying GOOD was both very fortunate and left them with a much better product.

13F holding update
iridian sold 3.5M shares but also bought 5.4M prior quarter, so still a net add of about 2M for the year. See pic for more, deadline is monday.
Kahn Brothers is unchanged.
New holders are 3 decent sized:
Jenison, Kornitzer Capital, and Beck Mack & Oliver all with about 1.5M to 1.8M each
Jenison added to their opportunistic fund

Prime cap added a few hundred thousand shares as well, but this is just adjustments they make every quarter, they can't add beyond 15% of total shares

Seems like the Indonesians are holding the BBM fort at the moment. ;-)

Translation courtesy of our friends at G.

Post-dimming popularity of fuel in cyberspace. The shocking news came from Vice President of Business Development BBM, Adrian Anwar. Adrian said that the interest of BBM users in Indonesia has not subsided. Even dikalim daily active users of BBM in Indonesia exceeds the number of daily Facebook users. "Out of a total of 65 million monthly active BBM users, 75 percent are daily active users. So there are about 50 millions active users every day. This percentage is larger than the active usernya Facebook, "said Adrian, in Jakarta, Saturday (5/8).

Until this month there are 65 million monthly active users of BBM or commonly called Monthly Active User (MAU) in Indonesia. In addition, the BBM application has been downloaded by 101 million users both on Google PlayStore and IOS Appstore.

Based on survey data, BBM entered into 3 major applications that are often downloaded on the PlayStore and ranked in the top 10 best-selling apps in AppStore.

According to Adrian, BBM is also popular in some countries. Among them are Canada, Qatar, United Arab Emirates, Nigeria and South Africa.

And yes, BB is targeting enterprise use. I've heard from our internal tools team that BBM SDK is substantially more expensive than twilio, but presumably much more secure.

Hm.. That's interesting. I guess BB are targeting the "high end market" aka high margin customers.

In one sense they have to start high, and then potentially introduce a lower tier if the customers doesn't come aboard.

Did they say anything about how the SDK is to use compared to Twilio?

Originally Posted by app_Developer

Twilio is obviously years ahead in customers and revenue.

If BB opt for a classic play out of Microsoft's playbook, aka "embrace and extend", and they bundle it with a base tier (which I guess the pricing doesn't indicate they will do), I guess things can get interesting for Twilio. That is to say, as long there is a customer overlap between BB and Twilio.

Hm.. That's interesting. I guess BB are targeting the "high end market" aka high margin customers.

In one sense they have to start high, and then potentially introduce a lower tier if the customers doesn't come aboard.

Did they say anything about how the SDK is to use compared to Twilio?

If BB opt for a classic play out of Microsoft's playbook, aka "embrace and extend", and they bundle it with a base tier (which I guess the pricing doesn't indicate they will do), I guess things can get interesting for Twilio. That is to say, as long there is a customer overlap between BB and Twilio.

I don't know how much overlap there is in market. Uber is this high profile example of a high volume use of twilio, but for regulated businesses like ours we don't. So BBM could potentially supplant the messaging system that we use to tell our customers that we've processed your credit card payment, for example. We wouldn't say that over twilio.

I don't know if we've actually used the SDK yet. That's a different group than mine.

Do you truly believe that JC can pull off a smart acquisition or partnership in the current market environment? One that fits their need (channel, revenue and a profit) and is within their budget. One that does not just result in endless restructuring programs, only to find out that it did not pay off in the end and that the cash is now gone?! Or is their money worth more in the bank, in case there is actual interest from Microsoft or Samsung as a potential suitor...? I wonder if someone cut off management's *****, or that the market has just gotten too expensive/risky for a decent return on investment. Because let's face it, we're not going to see $ 0.60 EPS any time soon, and what seems to be in their way is a decent sales channel. Imho, they should partner up, even if that includes taking a first step towards being acquired. I'm sure their competitors (in UEM, cybersecurity, asset tracking...) would gladly do so......

Posted via CB10

Hi _dimi_,

Good to see you here again. I'm tied up with projects right now and have little time to socialize here. To your question, JC will likely buy a private enterprise, not a public one that carries unrealistic values. My example would be the P/E of the NASDAQ and NY, they are too high for acquisitions. Secondly, MOBL is still above $ 4.00/shr and that tells me that companies within the realm of BB's capabilities are expensive as well. If MOBL traded around the $ 2.50/shr to $ 2.70 I would be inclined to think a public company acquisition is possible. With the exception of Good Tech, BB has been a buyer of private enterprise, companies we have never heard of so to speak. I do believe that partnerships are the better way to go as then both sides of the partnership are carrying the risks. Chen is not one for spending cash, he seems to be challenged when it comes to making money work for you. At no time has this company produced anything from all of that cash. You know they can create debt at $ 22 MM interest per year but what have they produced with $ 2.6 B over the past year?

You are making something of a statement here versus posing a question so I'll agree with your assertion that acquisitions are messy at best and difficult to absorb into any company. If BB could find some synergies in another company like Sierra Wireless I could get behind something like that.

The problem I have with the whole cash horde thing is that John Chen has not proven to be a master at generating wealth through acquisitions. I believe that the market, based upon past experiences is already discounting anything he will do with the funds. Investors feel that any purchase will carry such a premium that the transaction has to be discounted immediately and/or as of "today". I believe we are discounting cash on hand today because of the unlikelihood that Chen can make a decent purchase. Cash is becoming a negative for BlackBerry now simply because their track record of making cash work is very poor. This coupled with the outstanding bond issue which was tailor-made for Prem, is off-putting. That debt cost us a fortune to retire in penalty charges and then we borrow from the same guy with less favourible terms and lock ourselves into that deal. This tells me that Prem calls the shots and he prefers that BB transact its way out of a no growth scenario and not spend its cash on revenues.

That last ER was devastating and the follow-through silence speaks volumes of how challenging it has been for Chen to turn this ship around. You can look forward to Chen partnering, acquiring a distribution system, perhaps some RADAR competition etc., not much else is out there for him today.

Good to see you here again. I'm tied up with projects right now and have little time to socialize here. To your question, JC will likely buy a private enterprise, not a public one that carries unrealistic values. My example would be the P/E of the NASDAQ and NY, they are too high for acquisitions. Secondly, MOBL is still above $ 4.00/shr and that tells me that companies within the realm of BB's capabilities are expensive as well. If MOBL traded around the $ 2.50/shr to $ 2.70 I would be inclined to think a public company acquisition is possible. With the exception of Good Tech, BB has been a buyer of private enterprise, companies we have never heard of so to speak. I do believe that partnerships are the better way to go as then both sides of the partnership are carrying the risks. Chen is not one for spending cash, he seems to be challenged when it comes to making money work for you. At no time has this company produced anything from all of that cash. You know they can create debt at $ 22 MM interest per year but what have they produced with $ 2.6 B over the past year?

You are making something of a statement here versus posing a question so I'll agree with your assertion that acquisitions are messy at best and difficult to absorb into any company. If BB could find some synergies in another company like Sierra Wireless I could get behind something like that.

The problem I have with the whole cash horde thing is that John Chen has not proven to be a master at generating wealth through acquisitions. I believe that the market, based upon past experiences is already discounting anything he will do with the funds. Investors feel that any purchase will carry such a premium that the transaction has to be discounted immediately and/or as of "today". I believe we are discounting cash on hand today because of the unlikelihood that Chen can make a decent purchase. Cash is becoming a negative for BlackBerry now simply because their track record of making cash work is very poor. This coupled with the outstanding bond issue which was tailor-made for Prem, is off-putting. That debt cost us a fortune to retire in penalty charges and then we borrow from the same guy with less favourible terms and lock ourselves into that deal. This tells me that Prem calls the shots and he prefers that BB transact its way out of a no growth scenario and not spend its cash on revenues.

That last ER was devastating and the follow-through silence speaks volumes of how challenging it has been for Chen to turn this ship around. You can look forward to Chen partnering, acquiring a distribution system, perhaps some RADAR competition etc., not much else is out there for him today.

Sorry to bother you again, Morgan, but could you please clarify this bit:

"This tells me that Prem calls the shots and he prefers that BB transact its way out of a no growth scenario and not spend its cash on revenues."

Are you implying that Prem put JC in a situation where JC needs to grow revenue through organic sales, because Prem wants to preserve that > 2 billion in cash? Doesn't this mean that if JC doesn't succeed, Prem could very well be in favour of a sale?

To be honest, I'd rather have them sit on their cash pile instead of spending it on a new product that doesn't result in anything material. R&D or product pipeline really isn't the problem with BlackBerry.